ASHTON MINING OF CANADA (ACA) Message Board

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Gold/Mining/Energy : ASHTON MINING OF CANADA (ACA)

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To: Famularo who wrote (2205)	9/15/1997 10:58:00 PM
From: Jadrew	of 7966

Value of Ashton: Frank, I use the following "rules of thumb" to approximate the value of a diamond stock based on the stage of exploration /development and the probability of an economic find: (Disclaimer: the following are estimates based research readings) 1. Find Kimberlite with (good) diamonds - 5-10% chance of mine 2. Find additional promising diamonds in area- 15-20% chance of mine 3. Proceed to initial bulk sampling - 30-40% chance of mine 4. Advanced bulk sampling - 60%+ 5. Confirmation of mine - 100% What's the value of a diamond mine ? Using the price of Aber and Dia-met as a basis, a mine should be worth 2 billion +. Let's use $1.7 billion to be conservative. Given that Ashton has 42.5% of this find, a confirmed mine "could be" worth .425 * 1.7 billion = $700 million in market cap to Ashton. What stage is Ashton at now ? It would appear stage 2 (15-20%) of a mine. Value of Ashton ? 20% of $700 million or $140 million. Per share value (25 million shares) 140/25 = $5.60. Warning: if the company decides not to go to bulk sampling or if any stage of bulk sampling does not confirm previous values, the price will revert to stage 1 or worse, in Ashton's case probably to 5% chance of a mine given land holdings (or about $1.50/share). The spectics would say that Ashton's results don't warrant a 20% probability based on the quality of the diamonds found. Others may conclude that this is headed to bulk sampling. Do your analysis and make your own decisions. Good Luck.. As for Simple Simon, why did he wait until after the market close to report his "short", after the price had fallen ? No comment.

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